Today is Tax Day in the US. Many people are shocked that they aren't receiving a big refund. Well, the Trump tax law changes gave people slightly more money in their weekly paychecks withholding less. So they get a smaller refund or owe more today.
Most of the tax law changes benefited the wealthiest among us. By peculiar circumstances I actually owed slightly less. But mostly, for the first time, my Federal and State taxes refund/owed came out close to nothing. A few hundred to the State, a few hundred refund Federal. I'm pleased with that. It means I don't have to adjust my withholding.
But a whole lot of people are screaming mad about it because they depend on the Big Refund Check. And I get it. A lot of people who have trouble saving money use the Tax Refund as a sort of forced saving account. I feel for them.
Trump and the Republicans thought that people would notice the increased paycheck net. They were SO WRONG! They don't understand that people who live paycheck to paycheck don't notice a $30 increase much because they spend it as fast as they earn it. And mostly on legitimate things like food, shelter, credit card debt, and medicine.
I agree completely that the way to savings is to pay of existing credit card debt. But when paying an extra $30 per month on a $20,000 credit card debt doesn't make much of a dent in the total bill, it is hard to see how a weekly increase helps. I am personally fortunate to be debt-free; others aren't.
What most debt-ridden people WANT is a manageable (if forever) debt and a tax refund to splurge with. That's not the way to managing debt, but it IS what most people do...
There HAS to be a better system for those folks...
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2 comments:
I'm not sure how the federal government can address that.
I must admit to not really understanding the American tax system - it seems that every single person has to submit their annual tax return on April 15. Is that correct? Doesn't that lead to huge processing difficulties with lots of people looking for support from accountants leading up to that date and then the income tax department having to process everyone's return in a short amount of time?
The system in Australia spreads income tax returns over the course of the year. I typically don't lodge mine until 9 months after the end of the financial year.
Megan
Sydney, Australia
I think you sell the America public short about how they handle their money. That aside, how is it the Government fault that someone owes $20,000 in credit card debt? Did the Government force them to use their credit card? It's a board argument you make. For heavens sake give the Republicans credit for giving back to everyone as far as less taxes are concerned. NO my tax refund wasn't as much as last year, but really the Treasury isn't supposed to act like a piggy bank. I doubt too that most middle class Americans ever got back $20,000. If so the IRS would be auditing their taxes. I still like the idea that more of my money is my hands and not the Government.
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